Veeva Systems Set to Grow on Subscription Revenue Focus

On Nov 30, we issued an updated research report on Pleasanton, CA-based Veeva Systems Inc.VEEV – a global provider of cloud software and data solutions for the life sciences industry. The company currently carries a Zacks Rank #2 (Buy).

Year to date, Veeva’s shares have recorded an average return of 61.11%, higher than that of the Zacks categorized Computer Software Services industry average of 4.41%. The company has a solid track characterized by consecutive earnings beat in the four trailing quarters. Further, the company’s earnings estimates have moved north over the past one month. Analysts have revised the Zacks Consensus Estimate for 2016 earnings upward over the past 30 days, from 36 cents to 43 cents per share, which is a bullish sign.

Veeva’s industry-specific focus gives it a significant leverage, in our view. The company’s knowledge on the different components of the life sciences industry is helping it to build targeted products. Notably, product like Veeva OpenData provide customer data to all healthcare professionals (HCP), healthcare organizations (HCO) and affiliations across life sciences’ major markets.

The company has also strengthened the recurring part of its revenue mix with significant growth in subscription revenues in the reported quarter. Moreover, new launches at the Veeva Vault and the Veeva Coomercial Cloud platforms are encouraging. The company is also supported by considerable strength in its CRM platform.

Notably, after impressive third-quarter fiscal 2017 results, Veeva Systems is optimistic about its pipeline that includes an exclusive range of products on its flagship Vault and Commercial cloud platforms. These products include Vault CTMS, Vault PromoMats Dam, CRM Engage Meeting and CRM Engage Webinar.

A glimpse at the third-quarter results reveals strong revenues and adjusted earnings. Both the top and the bottom line beat the Zacks Consensus Estimate. Additionally, solid year-over-year subscription revenue growth has enhanced the recurring part of Veeva Systems’ revenue mix.

HMS Holdings has a long-term expected growth rate of 14.26%. Notably, the company has a solid one-year return of roughly 43.7%.

Medidata Solutions has a strong one-year return of roughly 23.4%. The stock represents a long-term expected growth rate of 22.33%.

IDEXX Laboratories represents a solid one-year return of almost 63.7%. The company has a long-term expected growth rate of almost 14.96%.

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